Broadcasters Looking to Congress, the FCC for Clarity on Cannabis Ads

Broadcasters are looking for intervention by either the FCC or Congress to allow them to run ads for marijuana products in states where cannabis or medical marijuana have been legalized, said broadcast attorneys and industry officials in interviews. Because marijuana remains a federally controlled substance, broadcasters fear losing their FCC licenses for running the ads even where cannabis is legal, attorneys told us. State broadcast associations and NAB have been pushing for legislation on the issue, but NAB Executive Vice President-Government Relations Shawn Donilon said at an NAB 2022 panel in April that those could “prove elusive” in the current Congress. Donilon said then NAB could seek potential relief at the FCC in the meantime, but industry officials told us no such request is imminent. Agency clarification on the matter would likely be enough to satisfy broadcasters, said Fletcher Heald broadcast attorney Frank Montero.

“These ads are already out there, on billboards and the internet,” said David Donovan, president of the New York State Broadcasters Association. “The only entity that runs a risk having them is broadcasting.” While the FCC hasn’t proactively said the ads can’t run, the potential risk of losing a broadcast license means that most attorneys recommend that their clients avoid running the ads, Montero said. Along with license woes, broadcasters are concerned that the lack of clarity could lead to an uncertain or delayed process for stations that are the target of complaints about marijuana advertising. Donovan said he regularly gets calls from broadcasters in New York -- where marijuana is legal for recreational use -- asking about potential ads for cannabis products. “It is in dire need of clarification,” Montero said.

Congressional or FCC action to make it clear that broadcasters wouldn’t be penalized for carrying advertising for products that are legal in the state where they’re licensed would address the issue, Donovan said. “All avenues are good,” he said. Under such a proposal, in states where only medical marijuana is legal, broadcasters would be able to run advertisements for medical dispensaries, and stations in states where marijuana isn’t legal wouldn’t be allowed to run such ads at all. Eighteen states have legalized recreational marijuana, and 37 have legalized medical use, according to the National Conference of State Legislatures. Donovan pointed to the prospective Safe Banking Act -- which in part would clarify rules for banks seeking to do business with cannabis businesses -- as a potential model for broadcasting.

FCC Chairwoman Jessica Rosenworcel hasn’t publicly weighed in on the issue of marijuana advertising, and the FCC declined to comment Friday. In a 2019 column for USA Today, then-Commissioner Rosenworcel took aim at electronic cigarette advertisements, calling on the FCC and the FTC to study the issue and arguing that the agency’s charge to serve the public interest includes public health. Commissioner Brendan Carr spoke against the proposal at the time (see 1902140063). Neither party has a rigid position on marijuana advertising, said Donovan. Anti-legalization group Smart Approaches to Marijuana included cannabis advertising as one of the indications that marijuana legalization would create another “Big Tobacco.” “The candies, ads, and elixirs all targeting children show us the road to legalization takes us to a place irreparably harmful to our future,” said SAM in an April release.

Letting broadcasters carry the ads goes beyond making more money for stations, Donovan said. In states that have legalized recreational use, “one of the goals is to shift the public from an illegal market to a legal one,” he said. “Buying from a licensed distributor is safer” and also allows governments to collect tax revenue, Donovan said. “Why wouldn’t you want the one entity licensed to serve the public to carry these ads?”